Tools to improve the financial health of your employees.
Most employee benefit plans are directly subsidized by the employer. For example,
the employer may pay a fixed percentage of the cost of employee medical insurance.
If the cost goes up by 20%, the both the employer's and the employees' costs also rise 20%.
This is called a "defined benefit" plan. There are only two ways to manage these plans. You can
either absorb any increases or reduce benefits.
A Full Cafeteria Plan introduces new set of management tools. First, the employer puts a fixed amount
of money at each employee's disposal. Initially, the amount is roughly enough for the employee
to duplicate current benefits. This is called a "defined contribution" plan. Then, the employee is
given a broader list of benefit choices. There are are least two medical insurance plans including one
which costs less than existing coverage. Other options, such as Flexible Spending Accounts are added.
The employee then decides how the employer's money is to be spent. If the employee spends more than
the employer provides, the employee pays the difference, usually with tax-free income.
You have accomplished two things. As the employer, you have gained complete control over benefit costs.
Each year you decide how much to make available to the employees. The employees have gained control
over where the employer-provided money is used. If they want, they can choose a lower cost medical plan
and put the savings in life insurance, or day care.
These programs can be extremely flexible. The plan design and funding are carefully matched to your
long-range goals and objectives. The employees appreciate the wide array of options and the ability
to match their benefits to their individual situations.
BenefitsWorkshop has a strategic relationship with one of the leading vendors of Cafeteria Plans in the
country. These programs can be complex and require a significant level of expertise and the support
of comprehensive enrollment and administrative systems. But a properly designed program produces
substantial savings, even after considering the implementation and ongoing costs. It is not unusual to
reduce total costs by 15-25% while increasing employee satisfaction with the benefit program.
These plans are suitable for employers with 300 or more employees.
When should you offer employees a Cafeteria Plan?
Cafeteria Plans are appropriate if:
You want direct control over employer benefit costs
You want to give employees more control over employer-provided funds
You want to give employees more flexibity in their benefit choices
You want to improve employee recruiting and retention
What if we are a small employer?
Full Cafeteria Plans are generally too expensive or are impractical because insurance companies
do not like to offer many choices to small employers, however, we can help you develop a
streamlined Cafeteria Plan that accomplishes many of the same objectives. Simply order
a proposal and we will contact you about your option.
How can I order a proposal?
Simply click the button below and complete the form. You should receive your proposal within 48 hours.
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